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address the loss of Redevelopment Agency affordable housing funds and increase the <br />production of affordable housing, the City adopted affordable housing impact fees for <br />both residential and non-residential development. The collected fees are deposited into <br />the Affordable Housing Fund and are used towards construction of new affordable <br />housing, acquisition of land, or conversion of existing units to low or very low-income <br />units. The fee program was designed to meet the requirements of a 2009 court <br />decision, Palmer/Sixth Street Properties, L.P. v. City of Los Angeles (“Palmer”), which <br />stated that requiring on-site construction of affordable rental units was a violation of <br />State Law, specifically the Costa-Hawkins Rental Housing Act. Cities were prohibited <br />from requiring inclusionary housing for rental projects. <br /> <br />In September of 2017, Governor Brown signed into law a package of housing bills <br />intended to address housing issues and the public review process throughout the State. <br />Two of the bills are related to the City’s efforts to encourage affordable unit production. <br />AB 1505 supersedes the Palmer case and allows cities and counties to require on-site <br />construction of affordable rental housing (also called “inclusionary” housing). In other <br />words, a City may now require that a certain percentage of units in each new housing <br />development be designated as affordable. In December of 2017, the City Council <br />initiated proceedings to consider an inclusionary housing requirement. <br /> <br />SB 35 provides an affordable housing streamlined review and decision process in <br />jurisdictions that have not issued enough building permits by income category within a <br />defined reporting period to satisfy the RHNA requirements. Eligibility for streamlining <br />under SB 35 is based upon the number of above-moderate and/or low-income units <br />produced within the reporting period. In the most recent reporting period, Redwood City <br />met the RHNA goal for above-moderate (or market-rate) unit production. As a result, <br />streamlining would apply for residential projects that contains at least 50% of the units <br />affordable to low-income households. <br /> <br />The City currently has several development-related policies and programs relating to <br />affordable housing: <br />1. An affordable housing impact fee for new residential, commercial and office <br />development. This impact fee program allows developers to build on-site <br />affordable housing in-lieu of the fee, if the developer chooses to do so. <br />2. A Downtown Precise Plan requirement that 15% (375 units) of the total 2,500 <br />new residential units be developed for low or very low income households <br />3. A requirement in the North Main Street Precise Plan that 15% of new market-rate <br />residential units be provided for very low, low or moderate-income households. <br />The 353 Main Street project meets this requirement by providing 19 very low, low <br />and moderate income units. <br />7.A. - Page 2